Facilitator: Ben MacGregor Expert: Gillian Schofield
Headlines:
- Wealth will be transferring to women first from their husbands prior to moving to the next generation – they will typically be the first point of transfer particularly following the death of the husband
- 60% of UK Wealth will be in the hands of women as the first point of transfer
- Only 50% of advisors have a wealth transfer strategy, and even less (7%) for women clients
- 65% of Inheritors will switch from their parents’ financial advisor
- Women Investors need a different experience to make investors from the advisor
Discussion Points:
There was discussion around the table as to the veracity of this figure – what investments does it include/not include?
There were a number of remarks around the table that although some firms had been planning for the intergenerational wealth transfer, few had recognised the importance or strategized for this initial transfer.
This wasn’t a surprise to a number of delegates given the UK demographics and the longevity of women compared to men.
This linked well to the next point of discussion because with all this wealth being concentrated in female hands it seemed short-sighted not to have a strategy to try to retain that wealth within the advisor business.
Advisors never ask who the decision maker is and have historically just assumed that it is the husband or male.
The 50% figure was a headline from the Scene Setter presentation in the morning. A number of delegates expressed surprise that it was that high as they hadn’t had many conversations with colleagues who had good strategies in place.
They wondered why, if the wealth transfer is such a huge opportunity for advisors, so few had thought out strategies?
But who would want to hold their hand up and say they had lost business due to a lack of strategy, or for their treatment of the wife?
It was generally agreed that both wealth managers and asset managers had been guilty of talking more to the husband when looking at wealth strategies. Some mentioned that they had actually been asked by the husband to speak only to him.
Discussion focused around how much more women will be responsible for their finances during their lifetime than previously, when often they could go from the parental home to marriage with little responsibility in either scenario.
Women are far more financially educated now than they were previously, meaning they expect and want to have these conversations.
It was felt that any wealth transfer strategy needed to be formulated by the executive and filtered down into the company, rather than done piecemeal.
Gillian mentioned that this should be called a wealth retention strategy rather than a wealth transfer strategy.
Amazing to note that 15% of advisor practices lost 50% of value in 2016/17. Again, there was some discussion as to these figures, and also around what strategies could be put in place to deter this.
Questions were also asked around where this money has gone, if it’s not with the advisor? It was suggested that some of these women aren’t getting a new advisor, but rather they are doing something different with their money.
Gillian mentioned research which highlights it’s often 6-8 weeks after a death that the advisor makes contact with the family. Often in that time other advisors have already made contact. It was noted that these women/families must be pretty fed up with their relationship to move so quickly.
Discussion around how this next generation of the family are more financially savvy – particularly the female investors: Only 50% of advisors have a wealth transfer strategy, and even less (7%) for women clients.
The 50% figure was a headline one from James’s presentation in the morning. A number of delegates expressed surprise that it was that high as they hadn’t had many conversations with colleagues who had good strategies in place
Wondered why, if the wealth transfer is such a huge opportunity for advisors, so few had thought out strategies
But who would want to hold their hand up and say they had lost business due to a lack of strategy, or for their treatment of the wife?
Women Inheritors are more likely to be guided by their children in their investments – so areas like sustainable investing are becoming more important.
It was noted that many women who had lost their husband would bring their children to their wealth meetings – whether face-to-face or virtually.
The children watched closely the way their mother was treated by the advisor and often were instrumental in the mother moving advisor if they thought she wasn’t being treated well.
The children, although often aging themselves, have different values than their parents, and are interested in different investments – hence ESG or sustainability being a key area of discussion.
One strategy being used was to separate out the family in different corners of a room and ask them for 9 objectives for future wealth planning. The answers from the husband/wife/children are often very different and this produces a useful platform for moving the conversation on.
There was discussion that to retain or attract female investors/savers it would be easiest to use advisors who were of the same demographic
Research from Eliza Filby suggests it’s more about the experience rather than who they speak with.
Women think differently from men about money. Many women are behaving like Millennials or Gen X’s when they inherit – starting new businesses, travelling, playing sports etc. They are starting a new life, not simply looking to retain their savings
This means a new strategy including empathy, trust, listening or a more personal relationship. Women are more likely to want to talk and ask more questions which his important to them.
It would make sense for advisors to start planning for this before the husband dies or they face the real prospect of losing this wealth to another advisor.
Discussion around how women will often have had no experience of running the family finances in the older generation – even to the point of not being able to use a bank card. This experience is changing rapidly though.
Key Takeaways:
- Plan early – get a strategy in place
- Treat each client as a person and find out about them – women need a quite different experience to men
- Base the planning on real life goals – e.g., sending to private school, retiring at 60 to travel, new car, helping your children into work. Helps to pull the client and the family into the process
- 55% of clients said they would invest more if the impact of those investments was aligned more to their personal goals
- Speak with the younger generation earlier in the process than you would do normally – is 10 too young?
